Calculate profit margins, markups, and selling prices in seconds. Perfect for retailers, e-commerce, and small businesses.
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Profit
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Margin
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%Cost vs Profit Breakdown
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Selling Price
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Profit
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%Profit margin is the percentage of the selling price that remains as profit after all costs are accounted for. It measures how much of each pound of sales is profit.
Formula:
Margin = (Selling Price - Cost) / Selling Price × 100
Example:
If you sell a product for €100 that costs €60, your profit is €40. Your margin is (40/100) × 100 = 40%
Markup is the percentage increase applied to the cost price to determine the selling price. It measures profit as a percentage of the cost, not the selling price.
Formula:
Markup = (Selling Price - Cost) / Cost × 100
Example:
If you buy for €60 and sell for €100, your markup is (40/60) × 100 = 66.67%
The key difference is the base used in the calculation. Margin uses selling price as the denominator, while markup uses cost. This means the same profit can have different percentages.
| Aspect | Margin | Markup |
|---|---|---|
| Definition | Profit as % of selling price | Profit as % of cost |
| Formula | (SP - CP) / SP × 100 | (SP - CP) / CP × 100 |
| Example (CP €60, SP €100) | (40/100) × 100 = 40% | (40/60) × 100 = 66.67% |
| Max Value | Always less than 100% | Can be any value |
Different industries operate with different standard margins and markups depending on factors like competition, product type, and operational costs.
| Industry | Typical Margin | Typical Markup |
|---|---|---|
| Retail / General Merchandise | 25-50% | 33-100% |
| Luxury / Designer | 40-70% | 67-233% |
| Groceries / Supermarket | 10-20% | 11-25% |
| Restaurants | 20-30% | 25-43% |
| Software / Services | 50-80% | 100-400% |
Include product cost, packaging, shipping, labour, and overhead. Don't forget hidden costs like storage, returns, and discounts.
Research competitor pricing and customer willingness to pay. Luxury markets support higher margins, while commodities operate on thinner margins.
Decide on your target margin based on industry standards and your business goals. This guides all your pricing decisions.
Use your target margin to back-calculate the selling price. Use our calculator to ensure all your prices meet your margin goals.
Regularly review your margins as costs change. Adjust prices to maintain profitability while staying competitive.
Margin is profit expressed as a percentage of selling price, while markup is profit expressed as a percentage of cost. They measure the same profit but from different perspectives, resulting in different percentages.
This depends on your industry. Retail typically operates at 25-50%, while grocery stores might be 10-20%. Software and services can achieve 50-80% margins. Research your industry to understand what's healthy.
You can increase margins by: reducing costs (bulk buying, better suppliers), raising prices (while staying competitive), improving efficiency, or shifting to higher-margin products. Use our calculator to model different scenarios.
Most businesses use markup for pricing (it's simpler: cost × 1.5 = 50% markup price) but should monitor margin to understand true profitability. Our calculator shows both so you can make informed decisions.
Yes. E-commerce sellers often need to calculate margins on hundreds of products. This calculator helps quickly determine profitable selling prices and monitor margins across your product range.